Real Life Trading Spring Portfolio 2016: First Edition
Real Life Trading Spring Portfolio 2016: First Edition
Hello, stock market fans, trading enthusiasts, excited investors and Real Life Traders from all over the world. Spring is here, the weather is warming, the trees are blooming and it's another incredible season to be alive and trading!
As you likely are aware, every month at Real Life Trading has a certain theme. April is 'Surprise Yourself Monthâ€ where we encourage our traders to do something they've never done before. Meet someone new, embark on a new journey, learn something new, drink something new, eat at a restaurant you've never visited before. I've already knocked out two places in Nashville I've never been to, so the month is off to a great start. I aim to venture into many new locales, learn new skills, read new books and try a new sport.
Regarding my trading, February and March were both an uphill battle for sure. I was profitable day trading during both months. March I only locked in 9.8R day trading. My (directional) swings I lost about 3R and my non-directionals (credit spreads and such) I locked in a few R to have an on par month. Nothing mind blowing, but it was a grind for sure.
I am so amped for summer to be here. An immense obstacle will be removed from my path here in a few months and I will continue my mission of enriching lives to an even greater extent.
Before summer gets here though, we get the privilege of enjoying Spring. We have a Nashville, TN meet up planned on the 24th of April and then the following weekend we're doing a Denver, CO meet up and another in Los Angeles in June!
Alright! Enough updates, let's chat charts. In this portfolio we're going to focus in on five stocks for the next three months and see if we can find some good trade set-ups on them. I don't recommend blindly purchasing these five stocks and holding them over the three-month period, but I will be keeping track of their performance as of this writing.
1. AAPL: Analysis on 4/6/16
Let's start with the beautiful vixen of the markets. Unquestionably, this is my favorite stock to own, trade and talk about. She will continue to be in every one of my write-ups simply because AAPL is such a fun, popular and profitable stock to trade.
From our last winter article, AAPL bounced very nicely off of the support at $95 and the 200 simple moving average on the weekly. Now, still looking at a weekly chart, AAPL is banging its head against the 100 SMA.
Now that the iPhone SE has been unveiled, I would like to see AAPL continue to battle the 200 SMA on a daily. The fact is, it's battling some very strong resistance right now. I am personally waiting to go bullish. Anyone in shares is likely selling some covered calls, probably the $115 for April expiration. That's about $0.23 of hearty premium for another 5 points away on AAPL.
I think short-term pullbacks are buyable on AAPL. Me personally, before I get into any new bullish positions on the short-term time frame I want more of a pull back OR I just might wait on earnings. Here's what I would like to see on a daily chart. Earnings are in late April. It's anyone's guess what happens. My thoughts: A gap up would bring on sellers and a gap down would bring on buyers - in a big way!
2. X: Analysis on 4/6/16
One of the easier tickers to remember out there in the markets. Good 'ol United States Steel. This stock had just a glorious bullish gap and go on the 2nd of March and boy did it 'go'. Traded to the 200 SMA in just two days. Many of the Real Life Traders out there profited from this move; two specifically, Bill B and Bob L crushed it! Bob (my buddy up in NY) has got himself a $16.50 put sale expiring on 6/8/15. He's got a few in the books as of recently.
I am looking for a buyable pull back on X. This is a stock where it's fun to trade options or stock. It has plenty of volume for sure and the daily EMA's have a pretty steep trend currently. That's why I am going to be a tad 'paytient'.
For those interested in stock ownership, I really dig the $15 April 15th, put sale bringing in about $0.20 of premium or the April week 4 $14 put sale for the same value.
Earnings appear to be on the 26th of April. My sentiment on X is pretty similar as AAPL. A gap up on earnings will probably be met with a lot of selling (due to its recent strong run up) and a gap down will probably get bought (due to those who missed this current bullish move looking to get in on the action).
In similar news, AKS looks really nice, too. It's forming a pennant pattern of sorts on the daily and has retested the 20 EMA on the daily (which X has not). I know my buddy Garrison G is just wrecking this thing as he bought LEAPS many weeks ago! I'm sure those are looking mighty fine at the moment!
If these two metal heads can calm down and keep resting until earnings, a pop in either direction could be a fun one to ride!
3. GLD: Analysis on 4/6/16
'I wanna know where da gold's at. Show me da gold.â€
When speaking about gold, silver and energies it's important to take into consideration the value of the US Dollar. It was rip roaring a few months ago as it traded into all sorts of resistance levels. Now it appears it's coming into some very solid support, setting up for a good buy low - sell high strategy.
At this point it appears the dollar index is forming a channel and is headed back down to prior support, along with the 100 simple moving average on a weekly chart. If the dollar bounces strongly off of that, GLD, SLV, other commodities, metals and energies might head down a tad lower.
For now, many bullish enthusiasts on gold are enjoying the bullish move.
Here's a glance at GLD on a weekly chart. GLD had a nice break above the 100 simple moving average on a weekly a few weeks back.
On a daily chart the 100 has crossed the 200 simple moving average, which is usually seen as a bullish indication, and it appears GLD is forming a consolidation here, too.
I personally was really looking forward to buying some of this ETF down at $98. It never quite made it down that far though. : /
Some really good volume, gaps and candles came in on GLD back in February, which leads me to believe this bullish move could be for real. It will depend whether the US Dollar ends up bouncing, though. Timing might be the key on this play. For now, the best thing I can see would be a bull put spread. April week 4 $112/$111 is paying about $0.07, which is on the low side for spreads. It likely will work though.
If you do own shares like a few Real Life Traders, you could consider a covered call around $122 for May. That's bringing in about $1.06 of premium and is also at a strong resistance.
The 50 EMA looks like it wants to prop up GLD a little bit as well.
Overall, I have the bias that GLD actually goes down lower, specifically below $1,000 an oz. But that will fully depend on the strength of the dollar. We will see. I do agree with anyone buying GLD, SLV or the physical metals down here for the long haul!
4. FSLR: Analysis on 4/6/16
I've had many solid success stories from students paying mad bills off of FSLR movements. This stock has been volatile and fun over the years. Our most profitable set ups have been share ownership and put sales, mixing in covered calls when the stock is trading into some resistances for those who do own shares.
Here's my longer-term perspective on FSLR.
It has formed a really nice trend line from the 2012 lows. There has been key support at $40 and has given many traders loads of chances to buy low, sell high into the $70 resistance.
As with many stocks, earnings is coming up on FSLR. It just recently had a bearish retest gap. It has six black candles in a row, signifying the 'need' for a small rest or retest. If that occurs, I am anticipating FSLR to roll back into the $58 area and then the $50 area, potentially before earnings on 4/28/16.
Keep in mind; I have seen the FSLR earnings date change numerous times before they actually are released. Just be cautious and remember they are coming up. So, at the moment, feeling a tad bearish on FSLR short term and then would look to buy again into the $50 area.
5. IBM: Analysis on 4/6/16
IBM. The famous tech giant beast. One of the massive laggards in Mr. Buffett's portfolio, but he isn't scared.
Here's a fact. IBM loves to channel on the daily level. At this point in time it has a great resistance at $153 and magnificent support around $132. IBM had a gorgeous double bottom back there in January with the 'Buy me now, pleaseâ€ one white soldier on 2/12/16. Then IBM broke through old resistance (and it acted as new support) when it retested after the obvious retest gap from 2/18/16. Then, off to the races IBM went.
As of right now, one could go bearish at this resistance, but you would need to hold over earnings likely before IBM hit a bearish target. One could consider shorting the stock and buying the $155 May wk 2 call option(s) as an insurance position. To help offset that cost, one could also sell the June $140 put. This would be a short collar: a covered put with a protective call. The R:R is decent with this play at a 1:2. Just something to consider if you were looking to play IBM as a channel and of course, if IBM were to gap up strongly, above $155, that would likely be a pretty bullish gap. If IBM gapped down, it likely would continue into $132-ish. On the chance IBM opens down there on earnings, that would probably be quite buyable.
Thanks so much for taking your time to read this article. I do appreciate it! Our mission at Real Life Trading is To Enrich Lives and we will continuously shout it from the rooftops. I'm very happy, pleased and blessed with the growth we've had in almost two years. And it's all thanks to YOU!
You rock! Have an amazing spring. Excited to check back on these stock/ETF Giants in the next few weeks. Until then, remember, Love life, live life and trade it!
C.E.O of Real Life Trading - Jerremy Alexander Newsome